Guangzhou Baiyun Electric Equipment Co., Ltd.'s (SHSE:603861) most bullish insider is CEO Ming Cong Hu, and their holdings value went up by 10% last week

Key Insights

• Significant insider control over Guangzhou Baiyun Electric Equipment implies vested interests in company growth
• 60% of the business is held by the top 4 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Guangzhou Baiyun Electric Equipment Co., Ltd. (SHSE:603861) should be aware of the most powerful shareholder groups. With 67% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥4.7b market cap following a 10% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Guangzhou Baiyun Electric Equipment.

Check out our latest analysis for Guangzhou Baiyun Electric Equipment

What Does The Institutional Ownership Tell Us About Guangzhou Baiyun Electric Equipment?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Less than 5% of Guangzhou Baiyun Electric Equipment is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Guangzhou Baiyun Electric Equipment is not owned by hedge funds. With a 17% stake, CEO Ming Cong Hu is the largest shareholder. The second and third largest shareholders are Ming Hu and Ming Gao Hu, with an equal amount of shares to their name at 17%.

On looking further, we found that 60% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Guangzhou Baiyun Electric Equipment

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own the majority of Guangzhou Baiyun Electric Equipment Co., Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥4.7b, that means they have CN¥3.1b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Guangzhou Baiyun Electric Equipment. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Guangzhou Baiyun Electric Equipment (1 is significant!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.